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How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay

October 22, 2014 Comments off

How Much (More) Should CEOs Make? A Universal Desire for More Equal Pay (PDF)
Source: Perspectives on Psychological Science (forthcoming)

Do people from different countries and different backgrounds have similar preferences for how much more the rich should earn than the poor? Using survey data from 40 countries (N = 55,238), we compare respondents’ estimates of the wages of people in different occupations – chief executive officers, cabinet ministers, and unskilled workers – to their ideals for what those wages should be. We show that ideal pay gaps between skilled and unskilled workers are significantly smaller than estimated pay gaps, and that there is consensus across countries, socioeconomic status, and political beliefs for ideal pay ratios. Moreover, data from 16 countries reveals that people dramatically underestimate actual pay inequality. In the United States – where underestimation was particularly pronounced – the actual pay ratio of CEOs to unskilled workers (354:1) far exceeded the estimated ratio (30:1) which in turn far exceeded the ideal ratio (7:1). In sum, respondents underestimate actual pay gaps, and their ideal pay gaps are even further from reality than those underestimates.

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New From the GAO

October 21, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Combating Terrorism: Strategy to Counter Iran in the Western Hemisphere Has Gaps That State Department Should Address. GAO-14-834, September 29.
http://www.gao.gov/products/GAO-14-834
Highlights – http://www.gao.gov/assets/670/666199.pdf

2. Federal Paid Administrative Leave: Additional Guidance Needed to Improve OPM Data. GAO-15-79, October 17.
http://www.gao.gov/products/GAO-15-79
Highlights – http://www.gao.gov/assets/670/666565.pdf

U.S. Knowledge-Intensive Services Industries Employ 18 Million and Pay High Wages

October 21, 2014 Comments off

U.S. Knowledge-Intensive Services Industries Employ 18 Million and Pay High Wages
Source: National Science Foundation

The commercial knowledge and technology-intensive (KTI) industries play a big role in the U.S. economy. The larger component of KTI industries—the knowledge-intensive (KI) services industries—employed 18 million workers and produced 22% of U.S. gross domestic product (GDP) in 2012. The smaller component—the high technology (HT) manufacturing industries—employed 2 million workers and produced 2% of GDP in 2012. Although smaller than KI services industries, HT manufacturing industries have a greater concentration of workers in S&E occupations and perform a larger proportion of U.S. research and development. Both KI services industries and HT manufacturing industries pay substantially higher wages than the private-sector average.

Three KI services industries (business, finance, and information) and six HT manufacturing industries (aircraft; communications; computers and office machinery; pharmaceuticals; semiconductors; and testing, measuring, and control instruments) classified by the Organisation for Economic and Cooperation and Development are discussed in this report.[2] (Note: Because various data sources used in this report classify industries differently, different numbers may be reported for KI and HT industries.)

Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share

October 17, 2014 Comments off

Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share
Source: Economic Policy Institute

More than five years have passed since the federal minimum wage was raised to its current level of $7.25 per hour. Over that time, the value of a minimum-wage income has fallen nearly 10 percent due to rising prices. Yet this decline is small in comparison to the drop in value of the minimum wage over the past four decades. After rising in line with economy-wide productivity in the three decades following its inception in 1938, the federal minimum wage has been raised so inadequately and so infrequently since the late 1960s that today’s minimum-wage workers make roughly 25 percent less in inflation-adjusted terms than their counterparts 45 years ago. Indeed, a full-time, full-year minimum-wage worker with one child is paid so little that income from her paycheck alone leaves her below the federal poverty line.

This failure to adequately raise the wage floor has contributed strongly to the stagnation of wage growth at the bottom of the wage distribution. This wage stagnation has, in turn, been the single greatest impediment to making rapid progress in poverty reduction in recent decades. Indeed, all of the decline in poverty reduction in recent decades can be accounted for by safety net and income-support programs (Bivens et al. 2014). In fact, managers at some of the largest and most profitable corporations in the United States today actively encourage their employees to seek public assistance to supplement meager paychecks (Eidelson 2013). All of this has led many to conclude that American employers are too often dodging their responsibilities as partners in the social contract—the understanding that Americans who work hard should be paid enough to make ends meet. Instead, too many low-wage employers are leaving both taxpayers and, more importantly, low-wage workers themselves to pick up the slack.

Recent protests calling for higher wages at many of these companies have highlighted this widening rift between what businesses are paying and what workers need to survive. Among the protesters’ demands is that employers begin paying workers adequately, instead of relying upon public funds to give their workers a decent standard of living even as corporate profits reach record highs.

This issue brief examines the use of public assistance programs by low-wage workers and assesses how raising the federal minimum wage to $10.10 over three years—as proposed by the Fair Minimum Wage Act of 2014, a bill introduced by Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.)—could affect utilization rates, benefit amounts, and government spending on these programs.

“State of Energy” 2014 Report — An In-Depth Analysis of the Oil and Gas Industry

October 15, 2014 Comments off

“State of Energy” 2014 Report — An In-Depth Analysis of the Oil and Gas Industry (PDF)
Source: Texas Independent Producers & Royalty Owners Association
From website:

The Texas Independent Producers & Royalty Owners Association is proud to release its second annual “State of Energy Report,” which offers a detailed analysis of national and state trends in employment and wages by the oil and gas industry. The report covers the leading ten states in the country, as well as provides an unbiased overview of the national oil and gas industry as well.

National Key Findings

  • The U.S. oil and gas industry employed more than 1,012,800 in 2013, up 3 percent or 30,800 from the previous year.
  • The oil and gas industry paid a national annualized average wage of $103,400 in 2013, more than 108 percent more than the national average private sector wage.
  • Payroll in the oil and gas industry totaled $105 billion in 2013, an increase of 1 percent from 2012, adjusted for inflation.

How Was Life? shows long-term progress in key areas of well-being

October 7, 2014 Comments off

How Was Life? shows long-term progress in key areas of well-being
Source: OECD

People’s well-being has generally progressed since the early 20th century across a large part of the world, according to new research published by a consortium of economic historians (CLIO-INFRA) and produced in collaboration with the OECD and OECD Development Centre.

How Was Life? Global Well-Being since 1820 shows that, with the exception of sub-Saharan Africa, countries have generally become more equal to each other in terms of well-being than in terms of per capita GDP – particularly in recent decades.

The study presents for the first time systematic evidence of trends in areas such as health, education, inequality, the environment and personal security over the past 200 years.

By bringing together long-term, historical data, the study makes an important contribution to key questions on the extent to which well-being has been linked to economic circumstances.

The historical data covers real wages, per capita GDP, educational attainment, life expectancy, height (used as a proxy for physical health and nutrition), personal security, political institutions, environmental quality, and income and gender inequality. The topics mirror those of the OECD’s regular How’s Life? report on measuring well-being.

Families Continue to Rely on Wives As Breadwinners Post-Recession

October 4, 2014 Comments off

Families Continue to Rely on Wives As Breadwinners Post-Recession
Source: Carsey Institute

This brief uses data from the 2013 Annual Social and Economic Supplement to the Current Population Survey to examine how President Obama’s proposed expanded eligibility and higher credit values might affect tax filers in both rural and urban America. Authors Jessica Carson and Marybeth Mattingly report that proposed changes to the earned income tax credit (EITC) will increase the share of workers without a qualifying child eligible for the EITC equally in rural and urban places, although rural residents are more likely to be eligible under both current and proposed policies. The average increase in the credit is $476, more than double the average current credit, and would be similar for married and single filers without qualifying children in both rural and urban places. The number of unmarried filers who would become eligible for the credit is significantly higher than the number of married filers, in both urban and rural places.

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